SEC's Schapiro Resigns After Whistleblower Suit

By InsuranceNewsNet

The Securities and Exchange Commission announced its chairwoman is resigning just days after a whistleblower lawsuit was filed alleging a massive scandal of a whole lot of sex and not enough oversight at the agency.

David P. Weber was an assistant inspector general at the SEC when he alleged that the inspector general H. David Kotz had engaged in misconduct that “compromised the integrity of several OIG [Office of Inspector Genera] investigations, including the highly publicized inquiries into the SEC’s mishandling of the Bernard L. Madoff and R. Allen Stanford Ponzi schemes.”

One of the many allegations in the lawsuit filed on Nov. 15 was that Kotz had an affair with the attorney representing some of Stanford’s victims. Weber alleged that the attorney, Gaytri Kachroo, had involvement in the SEC’s investigation into a court-appointed receiver in the Stanford case. Some of Weber’s allegations were confirmed by an external investigation conducted at the request of an SEC commissioner.

Weber also alleged he had investigated complaints against SEC Chairwoman Mary Schapiro and that she was aware of untrue accusations against Weber that led to his dismissal.